Why did Colorado’s data center bill die?
A Colorado state bill (SB26-102) aimed at regulating large-load data centers, mandating community review, and offering limited incentives, failed to pass the legislature. The bill's demise was due to widespread opposition from labor unions, environmental groups, and local governments, who had differing views on incentives and local control. Senator Cathy Kipp, the bill's champion, plans to reintroduce similar legislation next year.
State Senator Cathy Kipp's "Large Load Data Centers" bill (SB26-102), which aimed to regulate data center development in Colorado, introduce community review mandates, and offer limited incentives, was postponed indefinitely, effectively killing it in the legislative session. The bill's failure came despite a year of work by Kipp, a Democrat from Fort Collins, who sought to craft legislation balancing economic growth with protections for communities, ratepayers, and natural resources like air and water.
The defeat of the bill was a complex outcome, attributed to widespread opposition from various stakeholders. Labor unions, including electricians and pipefitters, lobbied against the bill, advocating for more generous incentives for data centers than Kipp's compromise offered, a position previously championed in a separate, also-failed bill by Rep. Alex Valdez. Additionally, environmental groups and local governments, represented by organizations like Colorado Counties Inc., expressed concerns; the latter felt the state bill intruded on local land-use authority, while a poll commissioned by Conservation Colorado indicated strong public support for rules to protect against "unrestricted data center growth." Utility companies, including Xcel and various electrical cooperatives, also reportedly found some provisions problematic, particularly regarding hourly clean energy requirements.
Kipp expressed frustration, stating that "91% of Coloradans also don’t want to write a blank check to some of the richest companies in the world." She had sought to ensure accountability, transparency, and public engagement before permitting. Despite the setback, Kipp announced plans to reintroduce a data center bill next year, vowing to include incentives but also warning that companies must approach Colorado communities thoughtfully and be accountable for potential harms to water, air quality, electricity grids, and farmland.